It has been roughly a decade since the end of the most recent recession in the United States, as determined by the National Bureau of Economic Research. Currently, consumer income and spending remain on solid ground with personal and disposable income continuing to grow on a slow upward trend.
Still, the threat of a recession looms on the minds of many consumers. Current political issues contribute to their concerns about the economy. In the event of recession, are you prepared to financially withstand the impact?
Should You Prepare for the Potential Risk of a Recession?
This is the question that many are asking as they assess their financial futures. During a recession, it is important to minimize any potential financial risks. However, doing this can also have an impact on your current investment strategy, and potentially reduce financial growth. A fine balance exists between overreaction and preparing for the seemingly inevitable.
Why You Should Know How to Prepare for a Recession
During the last recession, 8.7 million Americans lost their jobs and retirement accounts took a significant hit. Even today, more than a decade later, many are still struggling to repair the damage. Preparing for an economic crisis is a smart strategy for your financial future.
5 Ways to Recession-Proof Your Finances
There are methods that you can use to safeguard your finances. For example, here are five simple, painless ways to start recession proofing your finances.
- Pay down debt, especially high interest debt such as credit cards or auto loans.
- Identify areas to reduce spending. Cutting back on extra expenses can not only help pad your savings but also put you in a more frugal mindset for the future.
- Focus on saving. Every household should work towards saving money for six months of expenses.
- Know your risk. How at risk are your investments? How much of a financial hit can you withstand without incurring lasting damage to your finances?
- Consider a new skillset. If you currently work in an industry that may suffer from employment loss in the next recession, now is the time to consider training or education to acquire a new skillset.
Work with an Attorney Who Can Answer Your Financial Questions
If you have concerns about your financial future and how to best protect yourself in the event of job loss or creditor collection actions, The Sader Law Firm is the bankruptcy attorney in Kansas City you can trust. Contact The Sader Law Firm today at (816) 281-6349 and let us guide you to a more secure financial future.